Buying groups explore alliances

Buying groups explore alliances

By Wilson P. Dizard III

Jan 18, 2002

Terry Davenport, computer equipment contracts administrator for the Western States Contracting Alliance, predicts that state and local governments increasingly will turn to joint procurement to reduce costs.

State and local procurement officials long have been at a disadvantage compared to private-sector buyers who can exploit discounts and rebates, and the federal government with its greater buying clout. But state buyers have begun pooling their resources to get better prices from IT vendors.

Now two of the biggest joint purchasing alliances'the Western States Contracting Alliance and U.S. Communities'are exploring a partnership to further increase their purchasing power.

WSCA, established in 1993 to negotiate volume purchasing agreements, has seen its ranks increase from an initial cadre of 15 western states to 25, including eastern states such as Vermont, Georgia and Rhode Island.

The original WSCA members are members of the National Association of State Procurement Officials: Alaska, Arizona, California, Colorado, Hawaii, Idaho, Minnesota, Montana, Nevada, New Mexico, Oregon, South Dakota, Utah, Washington and Wyoming.

Over $1 billion bought

Through October 2000, WSCA members had purchased about $225 million worth of computers, software and peripherals through the alliance's contracts.

The organization's buying volume from October 1999 through September 2001 increased to $1.082 billion, WSCA announced recently on its Web site, at www.aboutwsca.org.

Davenport, an information system procurement specialist for the New Mexico State Purchasing Division, explained that WSCA's prices for items such as PCs, servers and routers go down as the number of the organization's purchases goes up.

'All of our procurement processes are Web-based,' Davenport said. 'That gives us the efficiencies and economies of scale to drive lower prices.'

Davenport said California, Nebraska and North Dakota have modified their state procurement laws to take advantage of WSCA contracts.

Richard Pennington, Colorado's purchasing director and the incoming chairman of WSCA, estimates that agencies in his state gain about a 10% discount on computers they buy through WSCA contracts compared to prices they could negotiate themselves.

'It saves on the administration of the agreements,' Pennington said. 'I can't point to a downside' of the WSCA agreements, he said.

Denise Lea, director of the state purchasing office in Louisiana's Administration Division, said, 'The most advantageous part [of WSCA participation] is that it is invisible to our users; it allows us to aggregate our [buying] volume' with other purchasers. Louisiana has WSCA agreements with Compaq Computer Corp., CompUSA Inc. of Dallas and Dell.

U.S. Communities, an organization sponsored by the National Association of Counties, U.S. Conference of Mayors, National League of Cities and National Institute of Government Purchasing, has five computer hardware contracts and one software contract. The organization sponsors about $50 million in computer purchases annually, according to general manager Steve Hamill.

Joint program possible

'We are considering a joint program with WSCA and NASPO,' Hamill said. His organization's programs are focused primarily on the nation's 87,000 local government entities.

The first step in the WSCA-U.S. Communities cooperative program would be a joint purchasing contract for office machinery, Davenport and Hamill said.

The contract would focus on 'universal machines,' Hamill said'copiers that also function as scanners and fax machines.

'We are breaking down the barriers to collaborative efforts across states,' Davenport said. 'This is the tip of the iceberg'there are going to be many more collaborative efforts.'